APPEAL from the Circuit Court of Winnebago County, the Hon.
JOHN S. GHENT, Judge, presiding.
MR. CHIEF JUSTICE SOLFISBURG DELIVERED THE OPINION OF THE COURT:
The plaintiff, Leland J. Nordlund, ex officio County Collector of Winnebago County, applied for a judgment of sale for delinquent taxes assessed for the year 1965 against property of the defendant, The Association of The Winnebago Home for the Aged. The defendant filed timely objections on the ground that the collector had been enjoined from placing its property on the tax rolls by a prior order of the county court of Winnebago County, entered March 7, 1960; that said order had never been vacated and, therefore, these proceedings are a collateral attack on that decree and invalid. It further asserted that the real estate was tax exempt during the period in question because actually and exclusively used for charitable and beneficent purposes as an old people's home pursuant to the provisions of section 19.7 of the Revenue Act of 1939. (Ill. Rev. Stat. 1965, chap. 120, par. 500.7.) The trial court entered a decree denying defendant's objections and upholding the judgment for the taxes as assessed. The revenue being involved defendant appealed directly to this court.
Defendant's appeal poses two questions: (1) Are these proceedings invalid as a collateral attack on a prior decree of the Winnebago County Court entered March 7, 1960, and (2) Is defendant's property exempt from taxation under our constitution and applicable statute?
We must first consider the validity and effect of the March 7, 1960, order of the county court entered in the county collector's application for judgment and sale for delinquent 1958 taxes. After a hearing on defendant's objection the county court found that defendant's property was used exclusively for charitable purposes and directed a refund of the protested taxes. The order continued to provide "that the County Assessor, Board of Review and County Collector be and they are hereby further directed to remove said property from the tax rolls and to refrain from entering it upon the tax rolls so long as the present ownership and use and the present statutory exemption remained unchanged."
Defendant insists that the county court, in adjudicating matters under an application for judgment and order of sale of real estate for delinquent taxes, acted as a court of general jurisdiction and its order directing removal and restraining the re-entry of defendant's property on the tax rolls was within the scope of its authority. They therefore claim that portion of the order is not subject to collateral attack in this proceeding, and, unless the March 7, 1960, order is vacated or reversed on direct appeal, the property could not be returned to the tax rolls without a showing of a change of ownership, use, or governing statute.
Plaintiff denies that the county court had equitable jurisdiction and argues that the part of the March 7, 1960, order granting equitable relief is a nullity.
County courts as they existed at the time of the 1960 proceedings were created by section 18 of article VI of our constitution of 1870. The applicable section reads in pertinent part as follows: "County Courts shall be courts of record, and shall have original jurisdiction * * * in proceedings for the collection of taxes and assessments, and such other jurisdiction as may be provided for by general law." Ill. Const., art. VI, sec. 18.
The applicable statutory enactment adds nothing to the constitutional provision regarding jurisdiction, merely stating that the "County courts shall have jurisdiction in * * * proceedings for the collection of taxes and assessments * * *." (Ill. Rev. Stat. 1959, chap. 37, par. 175.) No other statutory enactment then in force specifically provided county courts with any general equity jurisdiction; nor was there any wording in the statutes or constitution from which such jurisdiction might be inferred.
This court has consistently held that county courts have no general equity jurisdiction and could have such only by express grant from the legislature. The requirement of "express grant" was well illustrated in the decisions in McDonough v. Gage, 357 Ill. 466, and Gill v. Lynch, 367 Ill. 203. Both cases involved the question of the power of the county court to appoint a receiver to collect the rents and profits from real property pursuant to the provisions of the so-called Skarda Act. (Laws of 1963, p. 874.) The Skarda Act did not specify the forum in which receivership proceedings were to be conducted. Since it concerned tax collection matters, constitutionally and statutorily the province of county courts, it was argued that there was a compelling implication that the legislature intended these courts to administer such receiverships. Despite this, the court ruled in each instance that the appointments were void and of no effect because, as stated in McDonough v. Gage, 357 Ill. 466, 470: "County courts have no general equity jurisdiction and could have such jurisdiction only by an express grant from the legislature."
There is no question but that the county court on March 7, 1960, had jurisdiction of the parties and the subject matter and its order either entering judgment for or refunding 1958 taxes could not be collaterally attacked. However, we are of the opinion that the county court lacked the equity power to perpetually enjoin the taxation of this property. The March 7, 1960, order is in some ways similar to an order collaterally attacked in Armstrong v. Obucino, 300 Ill. 140, where the court stated at pages 142, 143: "The statement has very frequently been made that where a court has jurisdiction of the parties and the subject matter, its decree, however erroneous, can only be attacked on appeal or error; but the rule is subject to an exception equally well settled, that a decree may be void because the court has exceeded its jurisdiction. The bill prayed for the enforcement of the lien by a sale beyond and contrary to the powers given by the statute for enforcing mechanics' liens, and it does not follow that because the court had acquired jurisdiction of the parties and the subject matter it could make such a decree as was prayed for. Courts are limited in the extent and character of their judgments, and if they transcend their lawful powers their judgments and decrees are void and may be collaterally impeached wherever rights claimed under them are brought in question. The doctrine that where a court has once acquired jurisdiction it has a right to decide every question which arises in the cause, and its judgment or decree, however erroneous, cannot be collaterally assailed, is only correct when the court proceeds according to the established modes governing the class to which the case belong and does not transcend in the extent and character of its judgment or decree the law or statute which is applicable to it."
People ex rel. Baird and Warner, Inc. v. Lindheimer, 370 Ill. 424, and Nugent v. Toman, 372 Ill. 170, cited by defendant, do not involve the exercise of equity powers by the county court, but were concerned with alleged procedural defects in tax collection proceedings. The defects were not directly asserted as a defense, by motion or appeal, but were raised collaterally in post-judgment mandamus and injunction proceedings. In neither case was there anything on the face of the record to indicate that the county court had not acted within the constitutional and statutory limits of its authority.
However, the March 7, 1960, order on its face clearly went beyond the jurisdiction of the court in proceedings for the collection of taxes and, insofar as it purported to enjoin the collection of taxes not then before it, was void. The trial court was therefore not precluded from determining the propriety of the 1965 assessment.
We must therefore consider if the property is exempt from taxation because used exclusively for charitable and beneficent purposes.
Defendant was incorporated as an Illinois not-for-profit corporation in 1904. It has no capital stock or stockholders and, according to its original charter, vests its management functions in a board of 18 managers. According to defendant's brief and the testimony offered in the trial court, the number of managers has been increased to 25. We assume that this increase was effected through a change in the by-laws, since the only amendment to the corporate charter shown in the record concerned itself with a change in defendant's corporate name. Members are elected for two-year terms and all serve without pay, except the treasurer, who receives a salary of $125 per month. ...